Key insights
- ECB's Stournaras indicates monetary policy response hinges on the persistence of energy price shocks stemming from the Iran conflict. A temporary spike warrants limited action, while a stronger, persistent rise impacting inflation expectations and wages would necessitate a tighter monetary policy. This introduces uncertainty, potentially weighing slightly on US equities due to global economic interconnectedness.
ATHENS, April 6 (Reuters) - European Central Bank policymaker Yannis Stournaras said on Monday that the appropriate euro zone monetary policy will depend on the size and nature of energy supply disruption from the Iran conflict.
If the energy price spike proves to be temporary, the need for a monetary policy adjustment will be limited, ECB Governing Council member Stournaras, who is also governor of the Bank of Greece, told an annual shareholders meeting of the Greek central bank in Athens.
He added that a tighter monetary policy stance would be expected if the pressure from rising energy prices prove to be stronger and more persistent, affecting medium-term inflation expectations and wage developments.